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Yearly renewable Term Insurance
Term life insurance that may be renewed annually without evidence of insurability to a stated age.
Insurance Terms Used in the Area of Sureties and Bonds
Arrestee
A person in custody whose release may be secured by posting bail.
Bailee
A person or concern having possession of property committed in trust from the owner.
Bid Bond
A guarantee that the contractor will enter into a contract, if it is awarded to him, and furnish such contract bond (sometimes called "performance bond") as is required by terms thereof.
Court Bonds
All bonds and undertakings required of litigants to enable them to pursue certain remedies of the courts.
Effective Date
The date on which an insurance policy or bond goes into effect, and from which protection is furnished.
Fidelity Bond
An obligation of the insurance company against financial loss caused by the dishonest acts of employees.
Judicial Bond
A bond required in civil and criminal court actions.
Named Schedule Bond
A fidelity bond providing coverage for persons listed or scheduled on the bond.
Obligee
Broadly, anyone in whose favor an obligation runs. Frequently used in surety bonds, this refers to the person, firm or corporation protected by the bond.
Obligor
Commonly called "principal," one bound by an obligation. Under a bond, strictly speaking, both the principal and the surety are obligers.
Power of Attorney
Authority given one person or corporation to act for and obligate another, to the extent laid down in the instrument creating the power.
Principal
A person or organization whose obligation are guaranteed by a bond.
Surety
An arrangement whereby one party becomes answerable to a third party for the acts of a second party. Customarily an insurance company, the party in a suretyship arrangement who holds himself responsible to one person for the acts of another.
Surety Bond
A bond which the surety agrees to answer to the obligee for the non-performance of the principal (also known as the obligor).
Suretyship
Stated in its simplest terms, suretyship embraces all forms of obligation to pay debts or answer for the default of another.
GLOSSARY OF INSURANCE TERMS source: www.insurance.ca.gov
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